Viet Nam Social Insurance (VSI) was VND150 billion (US$9.3 million) over budget in the first four months of the year, as an increasing number of people bought into voluntary health insurance, said Hoang Kien Thiet, president of VSI’s Voluntary Health Insurance Division.

About 1.6 million people bought the insurance in the first quarter of the year, more than in all of 2007, he said.

Most of the extra spending went to Hanoi and HCM City, where the SVI sent an extra VND116 billion ($7.2 million).

Tong Thi Song Huong, director of the Ministry of Health’s Department of Health Insurance, estimated that last year they would have to pay an extra VND800 billion ($50 million) for every 1 million health insurance cards issued, when the Government announced an across-the-board increase in annual premiums for voluntary health insurance.

Under current regulations, urban residents pay a premium, of VND320,000 (US$20), and rural residents VND240,000 ($15), marking a VND120,000 ($7.5) increase.

Students in urban and rural areas pay VND120,000 and VND100,000 respectively, VND50,000 more than the old rate.

Hoang Kien Thiet, president of VSI’s Voluntary Health Insurance Division, said the overspending, figures for the first four months of the year weren’t up-to-date, as some localities had yet to send their full reports to his division. Thiet estimated that the overspending was likely closer to VND250 billion ($15.6 million).

Thiet said that unnecessary medical services, as well as expensive imported medicine, led to the extra spending. He also blamed residents who used other health insurance cards.

The up side, according to Thiet, is that extra spending is actually down from last year, which amounted to VND1.2 trillion ($75 million).

Most of the shortcomings leading to the extra spending should be addressed under the Law of Insurance set to be approved next November and taking effect in June 2009. Thiet said the regulations would force more people to buy the health insurance, and should improve management of unnecessary services.

Between 34-36 million people in the country now have health insurance. Thiet expects to have about 20 million more with the coming free health cards for children under six, and a 50 per cent subsidy for disadvantaged rural residents.

Despite the losses, Thiet reiterated that the State would continue to stand behind the SVI as State policy prioritises taking care of people’s health.

The Government plans to sell the cards to all students by 2010, relatives of workers and officials by 2012 and farmers by 2014.

Last year, they gave free health cards to people over 85, having already provided them to elders over 95, to ensure care of the elderly.